[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3997 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3997

To amend the Internal Revenue Code of 1986 to provide a credit against 
  tax proportional to the number of million British thermal units of 
           natural gas produced by a high Btu fuel facility.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 29, 2006

 Mr. Santorum introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide a credit against 
  tax proportional to the number of million British thermal units of 
           natural gas produced by a high Btu fuel facility.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Landfill Gas Act of 2006''.

SEC. 2. CREDIT FOR PRODUCTION OF NATURAL GAS.

    (a) Allowance of Credit.--Subpart D of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to business 
related credits) is amended by inserting after section 45M the 
following new section:

``SEC. 45N. CREDIT FOR PRODUCTION OF NATURAL GAS.

    ``(a) In General.--For purposes of section 38, in the case of a 
taxpayer, the amount of the natural gas production credit determined 
under this section for a taxable year is equal to the product of--
            ``(1) $2, multiplied by
            ``(2) each 1,000,000 British thermal units of natural gas 
        produced by the taxpayer at a high Btu fuel facility during the 
        taxable year.
    ``(b) Reduction in Credit Amount as Natural Gas Prices Increase.--
For purposes of this section, in the case of natural gas produced after 
the first day of a production month following the date on which the 
spot price of natural gas delivered at Henry Hub, Louisiana, on 
average, exceeds $6 per million British thermal units for 30 
consecutive trading days, the $2 amount under subsection (a) shall be 
reduced (but not below zero) by an amount which is equal to the amount 
by which such spot price exceeds $6 per million British thermal units.
    ``(c) High Btu Fuel Facility.--For purposes of this section--
            ``(1) In general.--The term `high Btu fuel facility' means 
        a facility that produces high Btu biomass fuel and which is 
        placed in service after the date of the enactment of this 
        section and before January 1, 2012.
            ``(2) High btu biomass fuel.--The term `high Btu biomass 
        fuel' means fuel produced from biomass (as defined in section 
        45K(c)(3)) that--
                    ``(A) contains no more than 7 pounds of water per 
                million standard cubic feet,
                    ``(B) contains not less than 95 percent methane per 
                volume, and
                    ``(C) has a Btu content of at least 950 per square 
                cubic feet.
    ``(d) Other Rules To Apply.--Rules similar to the rules of 
paragraphs (1), (3), (4), and (5) of section 45(e) shall apply for 
purposes of this section.
    ``(e) Denial of Double Benefit.--No credit shall be allowed under 
subsection (a) for natural gas produced by the taxpayer if a credit is 
allowed to the taxpayer with respect to such gas under section 45, 45I, 
or 45K.
    ``(f) Application of Section.--This section shall not apply to 
natural gas produced at any facility after the date which is 10 years 
after the date such facility is placed in service.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of such Code (relating to general business credit) is 
amended by striking ``and'' at the end of paragraph (29), by striking 
the period at the end of paragraph (30) and inserting ``, and'', and by 
adding at the end the following new paragraph:
            ``(31) the natural gas production credit determined under 
        section 45N(a).''.
    (c) Conforming Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45M the following new 
item:

``Sec. 45N. Credit for production of natural gas.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to natural gas produced after December 31, 2006, in taxable years 
ending after such date.
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